Caisse Centrale de Reassurance Affirmed at ‘AAA’

July 29, 2002

Standard & Poor’s Ratings Services affirmed its “AAA” long-term counterparty credit and insurer financial strength ratings on state-owned French reinsurance company Caisse Centrale de Reassurance (CCR). The outlook is stable.

The ratings reflect CCR’s status as a core element of the French government’s long-term policy of providing protection against noninsurable risks-mainly natural disasters. The ratings factor in the strong implicit support of the Republic of France (“AAA”/Stable/”A-“1+)-which includes an unlimited guarantee on the company’s natural-catastrophe (“Cat. Nat.”) insurance business-as well as the government’s close involvement in, and monitoring of, the entity.

CCR’s primary role is to provide to all insurers operating in France unlimited cover against natural catastrophes, such as floods, subsidence, and landslides. Windstorms are not covered by this classification. At year-end 2001, CCR’s role was extended to include terrorist-attack cover, for which the French State provides the same level of guarantee.

“Thanks to its unrivalled cover of the French Cat-Nat market, CCR has a very strong overall business position, although this is partly offset by its marginal presence in open-market reinsurance,” said Yann Le Pallec, a director in S&P’s Paris office. Capitalization is extremely strong, while operating performance remains affected by poor underlying results in the company’s ancillary activity of traditional reinsurance.

CCR is the 29th-largest reinsurance company worldwide, with income from gross premiums written of EUR899.5 million in 2001 (up from EUR820.8 million in 2000), of which 44 percent (37 percent in 2000) came from traditional reinsurance activity.

S&P’s stated that CCR has an extremely strong capital base, with capital adequacy in excess of 190 percent over the past five years. Through unlimited stop-loss cover provided by the state for the Cat-Nat scheme, CCR receives superior protection of its capital base against any extraordinary loss accumulation during any given year.

The company plays a strong role within the French government’s insurance policy and will likely continue to enjoy a high level of integration within that policy.

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