A.M. Best Assigns Ratings to SGI CANADA and Its Subsidiaries.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--May 22, 2002

A.M. Best Co. has assigned an initial financial strength rating of A- (Excellent) to SGI CANADA, Regina, Saskatchewan, Canada. A.M. Best has also assigned initial financial strength ratings of B+ (Very Good) to SGI CANADA Insurance Services Ltd. (SCISL), of Regina, Saskatchewan, Canada, and The Insurance Company of Prince Edward Island (ICPEI), Prince Edward Island, Canada. In addition, A.M. Best has upgraded the financial strength rating to B+ (Very Good) from B (Fair) of Coachman Insurance Company, Ontario, Canada.

The company is a government owned insurer in Saskatchewan where it administers the mandatory provincial auto insurance (Auto Fund) and writes personal and commercial lines business in the province in competition with private insurers. The rating reflects SGI CANADA's dominant market position in Saskatchewan, its experienced management team, consistently favorable operating performance and the implicit support provided by its government parent, the Crown Investments Corporation of Saskatchewan. SGI CANADA has demonstrated consistent profitability, disciplined underwriting and effective claims management. Its strong position in Saskatchewan provides SGI CANADA with significant pricing flexibility. Moreover, its claims and information services departments draw considerable benefits from the economies of scale afforded by the synergies between the Auto Fund and the competitive activities of the company.

Partially offsetting these rating strengths are the challenges confronting SGI CANADA in its out-of-province expansion efforts through its subsidiary, SCISL, and recently acquired subsidiaries, Coachman and ICPEI. While A.M. Best views SGI CANADA's efforts to diversify its business favorably, the subsidiaries are, at present, small and operate in difficult markets. Furthermore, the internally funded expansions have increased the leverage of SGI CANADA's capital base.

The ratings for the three subsidiaries reflect the disparity that exists between SGI CANADA's strength in its home province and the very difficult market conditions and adverse operating results that challenge the subsidiaries in Ontario and Prince Edward Island. Likewise, the subsidiaries' ratings consider the capital support, centralized investment management, reinsurance procurement, systems and management support provided by SGI CANADA.

SCISL operates mainly in Manitoba where it has written personal and small commercial lines business since 1993. The company acquired 75% of ICPEI in January 2001 and 100% of Coachman in July 2001. ICPEI is a significant personal lines and small commercial writer in the Prince Edward Island market. Coachman is a niche auto writer in Ontario.

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.