A.M. Best Places TIG Holdings, TIG Re Under Review With Negative Implications.

OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 28, 1998--A.M. Best Co. today placed the "A" (Excellent) ratings of TIG Holdings Group and its separately rated subsidiary, TIG Re, under review with negative implications.

This rating action is in response to the group's third-quarter earnings release and reflects A.M. Best's disappointment with the magnitude of the reported loss resulting from charges that far exceed recently set expectations. A.M. Best is also concerned with the uncertainties created by the group's weak stock market valuation, as well as its announcement that it is considering strategic alternatives, including its potential sale.

In addition, A.M. Best believes TIG Re will find it increasingly difficult to maintain its market viability because of its significant business retrenchment under new management in light of extremely competitive market conditions. TIG Re represents a significant portion of the group's consolidated book of business and, as a result of the emergence of unfavorable claims development on several of its large accounts and the corresponding increase in its reserves in 1997, it had a substantial impact on TIG Holdings' earnings trends. However, A.M. Best viewed the action favorably, as it elevated the group's reserves to more conservative levels within the actuarial range--which has since been corroborated by an outside actuarial firm--and considerably strengthened its balance sheet.

The ratings will remain under review pending A.M. Best's assessment of the market response to these announcements, as well as an ongoing evaluation of the group's strategic options.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.