S&P Affirms Everest Re (U.S.) ‘A-‘ Rating, Outlook Positive

May 21, 2002

Standard & Poor’s said that it has affirmed its single-‘A’-minus counterparty credit and senior debt ratings on U.S.-based Everest Reinsurance Holdings Inc., an intermediary holding company that is ultimately owned by Bermuda-based Everest Re Group Ltd.

S&P also said that it has affirmed its double-‘A’-minus counterparty credit and financial strength ratings on Everest Reinsurance Co. (Everest Re), Everest National Insurance Co., and Everest Reinsurance (Bermuda) Ltd., and had revised its outlook on all these companies to “positive” from “stable.”

The announcement said the action was based on Everest Re’s “operating companies’ strong market position, very strong operating results, extremely strong capital adequacy, conservative investment strategy, and strong financial flexibility.” Everest Re posted a 23.6 percent gain in first quarter operating income. (See IJ Website April 24)

“The positive outlook reflects Everest’s ability to produce operating results that have been consistently better than the industry average for the last five years,” noted Standard & Poor’s credit analyst Laline Carvalho.

S&P said that, “Partially offsetting these positive factors are the group’s aggressive premium growth–including strong growth in primary workers’ compensation business over the last two years–and reduced reinsurance program.”

The bulletin concluded that, “In 2002, Everest’s business mix is expected to change slightly toward longer-tail lines of business. Operating results are expected to be very strong in 2002 and 2003. In addition, any potential reserve deficiency is expected to be modest and have no material impact on the group’s earnings or capital adequacy over the medium term.”|”sp, affirms, everest, re, (u.s.), ‘a-‘, rating,, outlook, positive

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