Best Affirms Financial Rating for ASSA Compania de Seguros, S.A.

October 6, 2005

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of ASSA Compania de Seguros, S.A. (ASSA) (Panama City, Panama). The rating outlook is stable.

The rating reflects ASSA’s solid capitalization, historically favorable operating profitability and well established market presence as one of the leading insurance providers in the Panamanian market. The rating also reflects the company’s disciplined underwriting philosophy, strong control systems and conservative investment portfolio.

In addition, the rating recognizes the company’s favorable non-life loss ratio trends over the past five years; its well diversified and innovative product offering and the financial flexibility provided by its public-traded parent, Grupo ASSA, S.A.

ASSA continues its thoughtful expansion plans into the Central American market with strategic product offerings that provide growth opportunities into new markets. In addition, ASSA’s balance sheet is protected by a comprehensive reinsurance program provided by highly rated entities.

Partially offsetting these positive rating factors are the company’s geographic concentration in Panama and unfavorable underwriting results in its core health lines of business.

These results are attributed to higher than anticipated frequency and severity in claims. ASSA’s management has quickly undertaken measures to address the situation, including rate increases and tighter policy terms.

However, A.M. Best believes ASSA’s strong non-life operating trends, new life initiatives and the development of alternative distribution channels leave the company well positioned to sustain earnings.

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