S&P Affirms BRIT Insurance ‘A-‘ Ratings

February 7, 2002

Standard & Poor’s announced that it has affirmed its single-‘A’-minus counterparty credit and insurer financial strength ratings on U.K.-based BRIT Insurance Ltd. with a stable outlook.

S&P indicated that it had based its rating analysis on “BRIT’s very strong capital adequacy” It also noted the company’s “able management team with strong credentials for conducting certain specialized lines of financial risk business.”

Offsetting these factors were “Brit’s moderate, but improving, business position, and a volatile earnings history on the company’s catastrophe book, S&P noted. While the company does write

“modest amounts of catastrophe reinsurance,” S&P cited its diversification into “mortgage indemnity business and other financial lines, which are expected to account for an increasing proportion of in force risks,” as a positive factor.

BRIT had moderate exposure to the WTC attacks with estimated claims of around £26 million ($37 million), and S&P indicated that “excluding this loss event, underlying profitably in 2001 was strong.” BRIT maintained a 105 percent combined ratio between 1996 and 2000.

Commenting on the stable outlook, S&P noted that Brit’s capitalization, according to its standard model was in the ‘AA’ range, and that expected growth in its financial risks business and catastrophe underwriting were both expected to produce future growth.

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