S&P Rates Munich Re Mauritius ‘BBB’

November 9, 2005

Standard & Poor’s Ratings Services announced that it has assigned its “BBB” long-term counterparty credit and insurer financial strength ratings to Munich Mauritius Reinsurance Co. Ltd. (Munich Re Mauritius) with a stable outlook.

“Munich Re Mauritius is a Mauritius-based composite reinsurer,” S&P explained. “The company wrote gross premiums of $45 million in 2004, of which non-life business accounted for 95 percent.”

“The ratings reflect Munich Re Mauritius’ strong operating performance and good capitalization,” stated S&P credit analyst Nigel Bond. “In addition, although Standard & Poor’s considers Munich Re Mauritius not to be strategically important to the Munich Re group, one notch of implied support has been included in the ratings. These positive factors are offset, however, by the company’s very small size and restricted competitive position.”

S&P said the stable outlook reflects its “expectation that there will be no significant change in Munich Re Mauritius’ operating performance and capitalization. The company’s net combined ratio should be below 100 percent in 2005 and 2006, while the capital adequacy ratio should remain at least at 150 percent. A reduction in the investment concentration is not expected to lead to higher ratings.

“The Munich Re group (core entities are rated A+/Stable/–) is expected to show its commitment to Munich Re Mauritius through continued retrocession support. The company’s competitive position is expected to improve gradually as a result of growth in its key markets and greater market acceptance. If a local currency rating is assigned to the Republic of Mauritius, this may lead to a review of the ratings on Munich Re Mauritius.”

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