Fitch Places Chubb Corp. on Rating Watch Negative

October 29, 2002

Fitch Ratings has placed all ratings of The Chubb Corporation (Chubb) on Rating Watch-Negative. The ratings include the ‘AA+’ insurer financial strength (IFS) rating of Chubb’s property/casualty insurance subsidiaries, led by Federal Insurance Company, as well as Chubb’s ‘AA-‘ senior debt rating.

The move to Rating Watch primarily reflects uncertainty regarding the outcome of an ongoing reserve review that Chubb is conducting. A key focus of the review is on the adequacy of Chubb’s reserves for asbestos exposures. Chubb recently announced that its third quarter 2002 earnings release would be delayed to Oct. 30 in order to provide more time for the completion of the reserve review.

Fitch believes that Chubb’s asbestos reserves may increase materially as part of this review. Industry wide asbestos related losses have increased significantly in the last few years, due to increased claim filings, growing settlement and litigation costs, and broad expansion of the number of peripheral defendants that were not asbestos manufacturers or installers.

Based on these circumstances, Fitch believes that U.S. property/casualty industry asbestos reserves are deficient, and that companies need to complete ground-up reserve studies, similar to what Chubb is currently conducting, to gain a firmer understanding of asbestos loss exposures.

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 favorable 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 $31.3 billion and shareholders’ equity of $7 billion at June 30, 2002.

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