S&P Affirms Inter-Ocean Reinsurance Co. Ltd. ‘A’ Ratings

December 3, 2002

Standard & Poor’s announced that it has affirmed its ‘A’ counterparty credit and financial strength ratings on Inter-Ocean Reinsurance Co. Ltd. with a stable outlook.

S&P indicated it took the action “due to the company’s stable business model that provides regulatory arbitrage opportunities for its shareholders through a range of different structures but retains no insurance liability risk for its own account.”

“The company’s strengths include the limited risk retention and strong credit quality of the retrocessionaires,” observed S&P credit analyst Karole Dill Barkley. “Offsetting these positives are a limited business position and heavy reliance on its shareholders for business growth.”

S&P said it “expects Inter-Ocean Re to continue to generate returns on equity in the range of 4%-9% %. Capital adequacy is expected to remain at or above the rating range, and tangible net worth is expected to be positive.”

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