A.M. Best Affirms Ratings of EIG-Ansvar Limited.

OLDWICK, NEW JERSEY, U.S.A. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of "a-" for EIG-Ansvar Limited (EIG-Ansvar) (New Zealand). The outlook on both ratings remains stable.

The ratings reflect EIG-Ansvar's strong capitalization, continued improvement in its underwriting profitability and consistent net investment income. The ratings also acknowledge the company as a strategically important subsidiary of its ultimate parent, Ecclesiastical Insurance Office plc (United Kingdom), as it benefits from its niche position in the church and community group markets.

The company's underwriting results have been profitable over the past five years. The combined ratio was 83% in 2005, and averaged 87% during the same period. As a result of a relatively stable loss ratio and improved investment earnings, the company's operating ratio stood at approximately 74% as of year-end December 2005.

EIG-Ansvar's capital position has strengthened during the last five years due to full retention of operating earnings. The company's risk-adjusted capitalization, as measured by Best's Capital Adequacy Model, is enhanced by the high quality nature of the investment portfolio as well as conservative underwriting leverage. Its net premium leverage improved to 0.8 times in 2005 from 1.1 times in 2004. A.M. Best anticipates that the company will continue to maintain an adequate capital level to support its business growth.

Investment yield for 2005 was 7.5%, reflecting the conservative investment strategy of EIG-Ansvar. The company's investment portfolio is of high credit quality, with 69% of total invested assets in New Zealand government bonds, 19% in high rated corporate bonds and the remaining 12% in short-term deposits.

Partially offsetting these strengths are the softening premium rates in the commercial property market and the company's catastrophe exposure.

As a commercial underwriter with a niche market focus on religious and community groups, softening market conditions in competitive commercial markets will challenge the company to maintain profitable growth going forward.

Although EIG-Ansvar is exposed to weather-related catastrophic losses in various regions across the country, the company is adequately protected by a comprehensive global catastrophe reinsurance program purchased by the Group.

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.