A.M. Best Affirms Rating of Corifrance.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 30, 2002

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Corifrance (Paris, France) and assigned it a stable outlook.

The rating reflects the maintenance of an excellent level of financial strength and the improvement in the company's operating performance. Offsetting factors relate to the uncertainties associated with the company's future ownership, although its present owner, Markel Corporation, has stated that there is no urgency to sell the company.

Excellent capitalisation--At the end of 2001, the company reported an excellent level of capitalisation as measured by A.M. Best's risk-adjusted capital model. On a traditional solvency basis, the level was also conservative at 0.5 times. Corifrance has limited financial flexibility; however, the balance sheet is protected through the existence of a stop loss agreement with the guarantee of Markel Corporation, which provides for the payment of losses over an aggregate ratio of 120% up to a further 30% of net earned premiums.

Improving operating performance--In the most recent year, Corifrance reported strong growth in both gross and net premiums--13.4% and 22%, respectively--and improvements in each of its operating ratios. The company's underwriting performance, while remaining a loss, was a substantial improvement on the EUR 2.2 million (USD 2.0 million) loss reported in 2000, at EUR 1.2 million (USD 1.0 million). The solid investment return of 6.2% enabled the achievement of a bottom line profit and positive return on equity of 1.8%.

Future ownership uncertainties--Corifrance was put up for sale in 2000 when the Markel Corporation acquired Terra Nova. This remains the case today. Although the company has a limited profile in the worldwide reinsurance market, its focused strategy has developed a relatively small but growing portfolio. This has been built through long-standing relationships with a diversified client base of more than 300 primary insurers and brokers.

Expectations:

- The company will maintain a level of risk-adjusted capitalisation commensurate with the current rating level. In the short term, while under the ownership of the Markel Corporation, it is likely that capital and surplus will increase through the retention of earnings. It is not anticipated that the capital base will be eroded through the transfer of funds from Corifrance to the Markel Corporation.

- Operating performance will continue to improve, benefiting from management's focus on conservative, selective growth, underwriting for profit rather than volume and the improved environment with regard to rates, terms and conditions.

- A.M. Best will continue to monitor developments in the ownership of Corifrance.

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.