A.M. Best Affirms Ratings of London General Insurance Company Limited and London General Life Company Limited.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings of A- (Excellent) and issuer credit ratings of "a-" of London General Insurance Company Limited (LGI) (United Kingdom) and London General Life Company Limited (LGL) (United Kingdom). The outlook remains stable for all ratings.

The affirmation reflects A.M. Best's view that LGI and LGL are likely to maintain excellent risk-adjusted capitalisation in 2009 supported by robust retained earnings. LGI's risk-adjusted capitalisation also benefits from letters of credit which the company holds as collateral to mitigate reinsurer default risk.

A.M. Best expects LGI to report excellent technical performance at year-end 2008, benefiting from continued favourable rating conditions in its main lines of business. The economic downturn in the UK is not expected to have a significant impact on either LGI or LGL. LGI is likely to be exposed to an increase in unemployment related claims in 2009 but is expected to maintain profitability targets mainly through control of rating levels and profit share commissions paid to clients.

LGI's total gross premiums written are expected to increase by approximately 10% at year-end 2008 (2007: GBP 311.5 million), partly due to additional income from new contracts. In A.M. Best's opinion, the company's combined ratio is likely to remain at a comparable level to the 91% achieved in 2007.

A significant reduction in LGL's UK creditor business in 2008, driven by a major client closing to new business, has been offset by increased business volumes in continental Europe. The company's 2008 premium revenue is likely to increase by approximately 5% from GBP 32 million in 2007. LGL's year-end technical result is expected to increase to approximately GBP 3 million from GBP 0.7 million in 2007, supported in part by a reduction of approximately GBP 2 million in its long term business provision.

In A.M. Best's opinion, LGI and LGL have a good combined profile as specialist providers of extended warranty, accidental damage and creditor insurance. The companies write business across a broad range of European territories and occupy a good position in the UK, Irish and Dutch markets.

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

The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.