A.M. Best Affirms Rating of BF&M Limited and Its Affiliates.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) to BF&M Limited (BF&M) (Hamilton, Bermuda) and its operating affiliates. All ratings have a stable outlook.

These rating actions recognize BF&M's consistently strong operating performance, excellent capitalization, experienced and focused management and its substantial market share in the Bermudian healthcare market. The group benefits from the favorable regulatory environment where healthcare coverages must be provided by Bermuda companies. Healthcare service providers are limited to annual rate changes. Additionally, BF&M is the largest property/casualty writer in Bermuda on a gross premiums written basis. This business is significantly reinsured to alleviate catastrophic risk, which was evidenced by minimal net losses from Hurricane Fabian in September 2003. The Bermuda legal system significantly mitigates litigation risk. In 2005, BF&M expanded its property/casualty market through the purchase of over 51% of the shares of the Insurance Corporation of Barbados Limited (ICBL). This action not only greatly increases the group's premium volume, but simultaneously diversifies its exposure to hurricanes. Simultaneously, Bermuda International Insurance Services Limited was created to market life insurance solutions to affluent individuals on a global basis, thus broadening the group's life insurance base.

These advantages are partially offset by BF&M's dependence upon the insular and mature Bermudian economy, which limits the prospects for growth of the domestic insurance market. Ultimately, many factors related to the issue of economic scarcity are inherent in Bermuda's economy and lead to high expense loads across all lines of business. BF&M also remains highly susceptible to catastrophe events because of Bermuda's geographic location.

The FSR of A (Excellent) has been affirmed for BF&M Limited and its following operating affiliates:

--BF&M General Insurance Company Limited

--BF&M Life Insurance Company Limited

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For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies and A.M. Best groups, please visit www.ambest.com/pc.

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.