A.M. Best Assigns Ratings to B&B Insurance Co., OJSI.

OLDWICK, N.J. -- A.M. Best Co. has assigned the financial strength rating of C++ (Marginal) and an issuer credit rating (ICR) of "b+" to B&B Insurance Co., OJSI (B&B) (Belarus). The outlook for both ratings is stable.

The ratings reflect the company's insufficient level of financial strength to support the business according to A.M. Best's risk-based capital model, partially mitigated by its established position as the largest private insurer in a small but developing Belarusian insurance market, with moderate financial performance.

The company has a weak level of risk-adjusted capitalisation, dictated by a low level of capital and surplus relative to significant premium and investment risks. A.M. Best believes that the company's strategy to increase retained earnings through lower dividend payments of 15%, with projected premium growth up to 15% per annum, would improve its capital position going forward, though it is still likely to remain constrained.

B&B has established itself as the largest private insurer with a 9% share of the local non-life market, which is dominated by government owned insurance companies. The company has acquitted itself well in a market that has undergone significant legislative changes. However, going forward B&B faces further challenges maintaining its position operating in an uncertain insurance environment.

The company has consistently achieved positive underwriting results with a loss ratio of 83% in 2007, supported by moderate return of approximately 5% on investments. A.M. Best believes that despite these positive underwriting results and a comprehensive reinsurance programme, the net maximum exposures are material enough to impact further B&B's capital position.

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

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.