A.M. Best Assigns Financial Strength Rating to Old Mutual Life Assurance Company -South Africa- Limited; Assigns Issuer Credit Rating.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 26, 2003

A.M. Best Co. has assigned an initial financial strength rating of A (Excellent) to Old Mutual Life Assurance Company (South Africa) Limited (OMLAC (SA)) and an Issuer Credit Rating of "a-" to its non-operating holding company, Old Mutual Plc. A.M. Best has also assigned ratings on several debt securities issued by Old Mutual Plc and its subsidiaries. (See list below.) The outlook is stable.

The ratings reflect OMLAC (SA)'s excellent capitalisation and operating performance as well as its leading position in the South African market. Offsetting factors include the developing nature of the South African economy and the sensitivity of results to the performance of the Johannesburg Stock Exchange.

Domestic market leading performance--The Group is the largest financial services business in South Africa, providing life assurance, asset management, banking and general insurance services. The Group's South African life assurance businesses, operating through OMLAC (SA), is one of the leading financial services providers in the South African market with an approximate market share of 25% and estimated customer base of 5 million (about 10% of the population). The company benefits from an excellent brand and, together with its associated companies, is the leading provider of unit trusts and ranks amongst the top three asset managers.

In 2002, life premiums grew by an excellent 4.7%.

Excellent capitalisation--OMLAC (SA)'s stand-alone risk-based capitalisation is excellent, and A.M. Best expects it to be maintained at this level given the company's pricing and bonus declaration flexibility. The company is focused on efficient capital allocation for which it has established minimum returns on capital targets on a product by product basis.

Excellent operating performance--OMLAC (SA) enjoys solid profit margins above the market average. Return on allocated capital and assets have been resilient (22% and 1.5% at the end of 2002, respectively).

Developing economy--The interest rate environment and the volatility of the South African equity markets are going to continue to impact the attractiveness and profitability of traditional life insurance products. There are also ongoing risks and uncertainties associated with economic growth, unemployment levels, political and social instability and HIV.

A.M. Best has assigned an issuer credit rating of "a-" to the following issue by Old Mutual Plc:

-- EUR 400 million 6% medium term note issue due in 2007

A.M. Best has assigned an "a-" rating to the following issues by Old Mutual Finance (Cayman Islands) Limited:

-- USD 650 million 3.625% convertible bonds due in 2005

A.M. Best has assigned a "bbb+" rating to the following issue of Old Mutual Capital Funding LP:

-- USD 750 million, 8% guaranteed cumulative perpetual preferred

securities

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.