A.M. Best Affirms Ratings of SCOR, Upgrades Ratings of Converium AG and Removes Ratings From Under Review.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of "a-" of SCOR (France) and its rated subsidiaries. A.M. Best also has affirmed the senior debt and subordinated debt either issued or guaranteed by SCOR. (See link below for a detailed list of the ratings.) All ratings have been removed from under review with negative implications, and a stable outlook has been assigned.

A.M. Best also has upgraded the FSR to A- (Excellent) from B++ (Good) and the ICR to "a-" from "bbb+" of Converium AG (Switzerland) and its rated subsidiaries. All ratings have been removed from under review with positive implications, and a stable outlook has been assigned.

Concurrently, A.M. Best has upgraded the FSR to A- (Excellent) from B++ (Good) and the ICR to "a-" from "bbb+" of Investors Insurance Corporation (IIC) (Delaware). The outlook is stable.

The rating actions on SCOR reflect A.M. Best's expectation that the company will maintain its strong consolidated risk-adjusted capitalisation, despite the significant goodwill accrued as a result of the acquisition of Converium. Other rating factors include SCOR's excellent business profile in the European markets, which has been further enhanced through the acquisition of Converium, and its excellent operating performance.

In A.M. Best's opinion, SCOR's consolidated risk-adjusted capitalisation is remaining strong, despite the significantly higher goodwill accrued as a result of the Converium acquisition. In addition, the transaction has been partially financed by cash, thus reducing the combined group's capitalisation. Although SCOR intends to refinance the cash payment, the financial leverage would increase even if SCOR were to issue subordinated debt as A.M. Best's overall limit of 20% of total adjusted capital has already been reached. However, A.M. Best expects SCOR's financial leverage and fixed interest coverage to remain within the levels of the current rating.

In A.M. Best's view, SCOR has an excellent business profile in the European non-life market and life reinsurance markets. The improved financial strength has enabled SCOR to regain non-life business throughout 2006 and during the European renewal season earlier this year. In A.M. Best's opinion, SCOR has successfully integrated Revios into the group, thus significantly improving SCOR's life reinsurance franchise. The Converium acquisition is enhancing SCOR's business position, particularly in specialty lines where Converium has a strong presence, such as marine and energy and the participation in the aviation underwriter GAUM.

A.M. Best believes that SCOR is unlikely to retain the entire Converium portfolio partially due to policyholders' decision to reduce their combined share but also as a result of SCOR's ongoing due diligence.

SCOR's post-tax earnings in the first three months of 2007 have remained excellent, despite the exposure to the winter storm Kyrill, which negatively impacted the combined ratio by seven percentage points to 97.7%. Overall earnings in the first three months also have been positively influenced by Revios' profit contribution of EUR 39 million (USD 53 million) of operating profit, resulting in an excellent annualized return on equity of approximately 14%.

A.M. Best expects SCOR to maintain its underwriting standards despite the pressure on premium rates and the challenge from the integration of the Converium portfolio. In A.M. Best's opinion, the combined group's underwriting performance is likely to deteriorate for the full year 2007 as a result of Converium's stronger focus on long-tail liability business, where combined ratios are expected to remain above 100%. As a result of the acquisition, the combined ratio will also have a higher exposure to natural catastrophes in 2007, although this is being reviewed for 2008 renewals. A.M. Best expects SCOR to successfully integrate Converium into the group.

The upgrade of Converium's ratings reflects the rating enhancement from being a key member of the SCOR group. Other factors include the company's continuing improvement of its risk-adjusted capitalisation following the sale of its North American run-off subsidiaries. However, Converium's underwriting results are expected to remain negative in 2007 despite improvements in the property lines. In particular, the combined ratio of the long-tail liability business is expected to continue to be significantly above 100% but should nevertheless be compensated by future investment returns.

The upgrade in the rating of IIC reflects SCOR's renewed commitment to use IIC to write business in the United States market. This support includes a capital contribution, which will bring its risk-adjusted capital level in line with other similarly rated members of the group. Resources will be devoted to restarting marketing activities, including a relationship with an affiliated marketing company. IIC will be rebranded as a member of the SCOR Global Life Group.

For a complete listing of SCOR's and Converium AG's FSRs, ICRs and debt ratings, please visit www.ambest.com/press/082004scorfrance.pdf.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.