A.M. Best Assigns Ratings to Novae Insurance Company Limited.

OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating (FSR) of A- (Excellent) and an issuer credit rating (ICR) of "a-" to Novae Insurance Company Limited (NICL), a newly formed insurer based in the United Kingdom. The outlook is stable.

A.M. Best believes that initial capital of GBP 100 million (USD 190 million) and likely future retained earnings based on realistic assumptions will be sufficient to support excellent risk-adjusted capitalisation. While A.M. Best believes NICL may not achieve its initial objectives for premium volumes, the maximum likely levels have been factored into analysis, and the company's anticipated performance has been extensively stress tested.

A.M. Best believes that NICL's future financial performance will be good based on the performance of the existing account written by Novae Underwriting Limited (a service company) (NUL), on behalf of syndicates managed by Novae Syndicates Limited. This account principally comprises U.K. specialist liability business, and it will now be written by NICL. A.M. Best anticipates that NICL will achieve net loss ratios in the range of 50% to 55%, although there is likely to be a deteriorating trend toward the upper end of this range in the company's early years of operation driven by increasing competition. Although A.M. Best believes NICL's operating expenses are likely to be high, the company is expected to maintain a combined ratio below 100%, supporting modest underwriting profits from 2008.

A.M. Best believes that NICL will benefit from the profile of the Novae brand in the U.K. market developed by NUL. NICL will continue to develop the existing NUL portfolio of specialist liability business, emanating largely from the United Kingdom, comprising professional indemnity, medical malpractice, directors' and officers' liability and general liability. Nevertheless, business volumes are expected to be relatively modest with net premiums written likely to be below GBP 70 million (USD 133 million) in 2007, the company's first full year of operation.

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