Chubb Subsidiaries Placed on Negative Watch

September 25, 2001

Fitch has placed the “AAA” insurer financial strength (IFS) ratings of several subsidiaries of The Chubb Corporation (Chubb) on Rating Watch Negative. These companies are headed by Federal Insurance Company and include all members of the Chubb Intercompany Pool.

The rating actions reflects Fitch’s concerns that losses from the terrorists attacks in the U.S. as a percent of capital could ultimately prove to be larger than is consistent with expectations for the current rating category. Should ultimate losses remain consistent with Chubb’s present net of reinsurance pretax estimates of $500-$600 million, the rating will likely be affirmed and removed from Rating Watch. If losses grow more than current estimates, Fitch possibly will downgrade the ratings to a level that is likely no less than “AA+”, which still implies very strong capacity for timely payment of policyholder obligations.

Fitch will study the development of losses, as well as New Jersey-based Chubb’s plans to take other offsetting actions, and expects to resolve the Rating Watch over the next several months.

The ratings continue to be based on Chubb’s market position as a leading property/casualty insurer in several commercial and personal lines business segments, history of consistently positive underwriting performance, strong capital position at both the insurance subsidiary and parent holding company levels, conservative investment portfolio, and experienced management team.

The Chubb Corporation reported consolidated GAAP assets of $25.6 billion and shareholders’ equity of $7.0 billion on June 30, of this year. The company finished as the nation’s 13th-largest property/casualty insurer based on 2000 net written premium.

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