S&P Assigns ‘A-‘ Rating to Aviabel Cie.

November 24, 2004

Standard & Poor’s Ratings Services announced that it has assigned its “A-” long-term counterparty credit and insurer financial strength ratings to Belgium-based insurer Aviabel Cie. Belge d’Assurance Aviation S.A. (Aviabel) with a stable outlook.

S&P noted: “Aviabel specializes in Benelux aviation insurance, and enjoys an 80 percent share of the region’s market. It underwrites a mix of airlines, both commercial and general aviation. Net premiums written totaled 13 million euros ($17 million) at Dec. 31, 2003.

“The ratings reflect Aviabel’s strong capitalization, solid operating performance and qualitatively strong–albeit niche–competitive position. These factors are offset by the concentration risk on aviation business lines and the company’s exposure to reinsurance rates and capacities.”

“We expect Aviabel to continue to capitalize successfully on its home markets, with the Benelux operations remaining the key value driver,” stated S&P credit analyst Emmanuelle Cal├Ęs. “The company is set to face mounting pricing competition in its international segments in the short term, which is likely to have some bearing on premium growth and earnings performance.”

S&P also noted that “Aviabel’s total net premiums written are set to decrease by 10 percent in 2004, and to stabilize in 2005/2006. The net combined ratio is expected to remain at less than 100 percent in the medium term, while the capital adequacy ratio is expected to remain comfortably in the “AAA” category.”

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