A.M. Best Special Report: 2006 Financial Update-- The 'AMB' Insurance Stock Index Soars 33% In Two Years.

OLDWICK, N.J. -- Global insurance stocks as measured by the "AMB"--A.M. Best's flagship Global Insurance Composite Index (AMBG) of 185 insurance industry stocks--advanced by 13.8% in 2006, on top of a 16.9% increase in 2005, according to a special report from the A.M. Best Co.

In contrast, the "Dow"--the Dow Jones Industrial Average (DJIA)--gained 16.3% in 2006, following a 0.6% decline in 2005. Over the past two years, that translates into a 33.1% gain in the AMB versus a 15.6% gain in the Dow.

Performances of A.M. Best's Insurance Stock Indexes varied sharply by region and by market segment in 2006. Factors ranging from catastrophes, or lack of the same, to a political shift in the U.S. Congress, affected the performances of the various insurance stock indexes. By region, the European Composite Index had the top gain of 29.5%. The Global Reinsurance Stock Index rose by 22.7%, the strongest performance in any of the tracked market segments.

Graphs in the report show two years of daily closing prices for each of the 15 A.M. Best's Stock Indexes. Where most indexes have some correlation to broad stock market activity, each regional or market-type index has its unique features. For example, most of the indexes mirror the broad market swoon seen in mid-2006 and the strong market rally at year-end, but the U.S. Life Insurance Index largely escaped the midyear sell-off. The impact of New York state Attorney General Eliot Spitzer's probes of insurance brokers and insurers--including AIG, which has the largest market cap for an insurer--can be seen in both the Global and U.S. Insurance Brokers Indexes, as well as the U.S. Multi-Line Insurance Index. Impacts from the unusually severe 2005 hurricane season and the quiet 2006 season also are evident in the affected Reinsurance, Non-Life and Multi-Line Insurance Stock Indexes.

Traditionally, the broad life/health and property/casualty insurance segments have outperformed the industrial sector equities reflected in the DJIA, as happened in the two years ended December 31, 2006, and as shown in the report's Historical Indexes section. Against March 1942, A.M. Best's Historical Life/Health Index stands close to a 1,000-fold increase, the Property/Casualty Index is at a 525-fold increase, and the DJIA is at a 125-fold increase.

The current A.M. Best's Insurance Stock Indexes, as calculated by Dow Jones Indexes, were introduced formally on December 1, 2006. The indexes are weighted based on free float market capitalization. Component issues are for companies where the primary business is insurance related, where the company or one or more of its subsidiaries has an interactive Best's Rating, and where the company's shares are publicly traded on a major exchange. The interactive rating qualification does not apply to insurance brokers, which are not rated by A.M. Best. The global indexes are based in U.S. dollars. A more detailed methodology is included as an appendix to the report and is available at www.ambest.com/stocks.

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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.