A.M. Best Assigns Initial Ratings to Quanta Insurance Companies.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 4, 2003

A.M. Best Co. has assigned initial financial strength ratings of A- (Excellent) to Quanta Reinsurance Ltd., and its strategic subsidiary, Quanta Reinsurance U.S. Ltd. (both of Bermuda). The rating outlook for both companies is stable.

Both companies are wholly-owned subsidiaries of Quanta Capital Holdings Ltd. (Quanta), also a Bermuda-based holding company, newly formed to provide specialty lines insurance, reinsurance and risk assessment and risk consulting services on a global basis.

These initial ratings take into consideration Quanta's $550 million private equity offering completed on September 3, 2003, as well as the initial capitalization and business plans of Quanta Reinsurance Ltd. and Quanta Reinsurance U.S. Ltd. In addition, these initial ratings take into account Quanta's experience management team, its near-term earnings prospects, the benefits to be derived from Quanta's diversified specialty product offerings and the recent price firming throughout the property/casualty insurance and reinsurance markets. These ratings also consider management's intention to prudently manage and allocate capital among its subsidiaries in accordance with levels previously discussed with A.M. Best. Quanta benefits from its strong balance sheet, which is unencumbered by debt and prior year reserve liabilities.

Quanta Reinsurance Ltd. will principally underwrite Bermuda sourced reinsurance, while Quanta Reinsurance U.S. Ltd. will focus on underwriting U.S. sourced primary insurance business. Quanta's business plans include the acquisition of two licensed U.S. insurance companies with little or no pre-existing business within the next several months--one an admitted carrier and the other a non-admitted, excess and surplus lines insurer--to join Quanta Reinsurance U.S. Ltd. in underwriting U.S. primary insurance business.

Central to the group's operating strategies will be its specialty insurance and reinsurance products and policies, which will require technical underwriting and risk assessment resources and, in many cases, engineering expertise. Management expects the group's internal technical expertise will result in less competitive pricing pressures and volatility, and in combination with disciplined pricing, to result in superior operating returns.

These positive rating factors are offset by the significant challenges and uncertainties associated with newly formed, start-up companies, including the successful execution of its business plans, Quanta's acceptance among insurance and reinsurance brokers and management's ability to grow its business profitably. Additionally, unlike other start-up insurers, Quanta does not have an established and well-capitalized insurance parent, or sponsor(s), capable of providing financial and/or operational support. As with any other newly-formed organization, A.M. Best will closely monitor Quanta to ensure that targeted results are attained. Moreover, A.M. Best will continue to evaluate Quanta's capitalization to ensure capital and surplus are in compliance with A.M. Best's standards relative to the 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.