A.M. Best Affirms Ratings of Al Mohandes Insurance Company.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B++ (Very Good) and the issuer credit rating of "bbb" of Al Mohandes Insurance Company (Mohandes) (Egypt). The outlook on both ratings remains stable.

The ratings reflect Mohandes' very good risk-adjusted capitalisation and solid operating performance. A partially offsetting factor is the increasing competition that exerts pressure on the company's market position.

A.M. Best expects Mohandes' risk-adjusted capitalisation to remain very good at year-end June 2006, factoring the high concentration of investments in Egypt.

A.M. Best forecasts that an increase in investment income will lead to an improvement in the life technical result to EGP 5 million (USD 0.9 million) at year-end June 2006 (compared to EGP 4 million (USD 0.7 million) in 2005). The company's strict measures to reduce administration costs, in A.M. Best's opinion, are likely to lead to a combined ratio of approximately 90%-95% at year-end June 2006, resulting an overall good profit (before transfers to reserves) of EGP 22 million (USD 3.8 million) at year-end June 2006. Mohandes' 2005 profits significantly improved to EGP 29 million (USD 5 million) as a result of significant reserve releases.

In A.M. Best's opinion, increasing competition from existing domestic companies and foreign entrants into the Egyptian market exerts pressure on Mohandes' market position. As a consequence, the company is likely to continue to focus on small and medium-sized entities where there is less competition and to introduce new life products to defend its market share.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

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.