S&P Assigns ‘A’ Rating to ACE New Zealand

June 18, 2004

Standard & Poor’s Ratings Services announced that it has assigned its ‘A’ insurer financial strength and counterparty credit ratings to the New Zealand-domiciled general insurer, ACE Insurance Ltd. (ACE Ins NZ), with a stable outlook.

“The ratings reflect the company’s strategic importance to the
Bermuda-based ACE group, which is a major international insurance and reinsurance group,” said S&P credit analyst, Carolyn Rajaratnam, Financial Services Ratings group.

“The ratings also benefit from ACE Ins NZ’s supportive operating performance through underwriting capabilities, and a conservative investment strategy,” she added.

S&P noted that the company has a “noticeable presence in certain niche segments of the New Zealand commercial insurance market,” and a good “competitive position overall,” but it is a small company.
“The rating is predicated on ACE Ins NZ remaining prudently capitalized, operating performance remaining at least in line with that of the ACE group, and on the New Zealand insurer remaining a strategically important member of the group,” Ms. Rajaratnam concluded.

“ACE Ins NZ’s growth is likely to moderate in its niche segment focus, with a slowdown in gross premiums being written from the current strong level,” the report continued. “Management is expected to focus on market position, rather than market share, underpinned by prudent pricing and sustainable recurrent premiums. Capitalization should moderate but remain consistent with its rating, supported by good internal capital generation, and the combined ratio is expected to remain less than 90 percent in the near term.”

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