Best Extends Munich Re’s A++ Rating to its U.S. Subsidiary, MARC

OLDWICK, N.J., Jan. 11, 2001—A.M. Best Co. has extended the A++ (Superior) financial strength rating of Münchner Rückversicherungs-Gesellschaft (Munich Reinsurance Co.) to its wholly owned U.S. subsidiary, Munich American Reassurance Company, Atlanta, Georgia.

This action removes the company from under review and upgrades the financial strength rating of Munich American Reassurance Company following MARC’s recent acquisition of CNA Financial Corporation’s life reinsurance operations. MARC is considered core and integral to the Munich Re group’s overall strategy to enhance its market position in the United States and is critical to its ongoing success and viability in the global life reinsurance market. In addition, this rating assignment recognizes MARC’s strategic role in the Munich Re Group as the exclusive life reinsurer in the U.S. marketplace and the parent company’s continued financial backing through a surplus guarantee and additional capital investments to support MARC’s growth strategy. The financial strength and debt ratings on Munich Reinsurance Co. and its insurance affiliates are unaffected by this transaction.

Like many of its competitors’ individual life reinsurance operations, MARC faces a pricing environment which will pressure margins in the near term. A.M. Best also recognizes the challenges that exist with integrating CNA’s life reinsurance operations and sustaining profitable organic sales momentum. However, many opportunities for growth exist for the company given Munich Re’s preeminent market profile, outstanding geographic and business diversification and superior capitalization and financial flexibility. The Munich Re group’s global franchise and scope of operations allow it to sustain its international leadership position with reinsurance relationships in over 150 countries.

A.M. Best also acknowledges Munich Re’s continued support to the U.S. market following the group’s reorganization of its U.S. life and non-life operations under a new holding company, Munich-American Holding Corporation, Delaware. This new holding company will own MARC and the American Re Corporation Group, based in Princeton, New Jersey.

A.M. Best Co., established in 1899, is the world’s oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best’s Web site at www.ambest.com.

A.M. Best Co.