S&P Assigns ‘BBB’ Rating to Bahrain Reinsurer

June 23, 2004

Standard & Poor’s Ratings Services announced that it has assigned its “BBB” long-term counterparty credit and insurer financial strength ratings to Bahrain-based reinsurer Arab Insurance Group (B.S.C.) (ARIG), with a stable outlook.

“The ratings are based on the group’s good competitive position in the Middle East and North Africa and very strong capitalization, offset by adequate operating performance,” Stated S&P credit analyst Simon Marshall.

S&P said it based the stable outlook on the expectation that “the group will dispose of its insurance subsidiaries by year-end 2005, realizing at least the fair value of net assets.” It also added that “operating performance is expected to remain adequate,” and the company’s combined ratio is expected to improve in 2004 to 107 percent from 114 percent.

“A key measure of management’s success in insulating the future from the issues of the past will be the impact of prior year loss reserve development on prospective operating performance,” Marshall added. S&P also indicated that it expects ARIG’s capitalization “to remain very strong.”

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