A.M. Best Upgrades Ratings of AXA Re and its Subsidiaries.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit rating to "a" from "a-" of AXA Re (France), AXA Re Asia Pacific Pte. Ltd. (Singapore) and CGRM (Compagnie Generale de Reassurance de Monte Carlo) (Monaco). The outlook for all ratings is stable.

The ratings reflect AXA Re's excellent consolidated risk-adjusted capitalisation, which was recently enhanced by a EUR 150 million (USD 179 million) subordinated 20-year loan from its parent, AXA S.A., very good operating performance and an excellent, albeit reduced, business profile. The ratings of AXA Re Asia Pacific Pte. Ltd. benefit from a full rating enhancement due to its integral role within AXA Re.

Excellent risk-adjusted capitalisation--AXA Re's prospective consolidated risk-adjusted capitalisation is excellent and in line with its parent's A (Excellent) rating. The successful transfer of AXA Re's U.S. operations to AXA S.A. and the overall planned premium reduction has contributed to reducing volatility and lowering AXA Re's risk profile. The EUR 150 million (USD 179 million) subordinated loan from AXA S.A. has enhanced the company's capital base to comfortably support business growth. AXA Re's absolute level of capital is likely to be maintained over and above immediate needs with net profits fully distributed as dividends to the parent company.

Very good operating performance--Earnings improved in 2004 to EUR 106 million (USD 126 million) as a result of stricter underwriting discipline and the successful implementation of a cost reduction plan, which will deliver its full results by the end of 2005 (when A.M. Best anticipates a total net income in the range of EUR 130 million (USD 155 million)). A.M. Best expects AXA Re's loss ratio to stabilise at approximately 63% in 2005 (compared to 64% in 2004 and 76.7% in 2003), reflecting the improving underwriting and the positive effect of the transfer of run-off business to the parent. The expense ratio will be reduced (45.9% in 2004) as the fixed cost base is gradually adjusted to the new lower business volume, but it will remain high at 37% in 2005. The consolidated combined ratio will most likely fall to approximately 99% from 109.9% in 2004 (approximately 106% excluding the effect of the U.S. subsidiaries that were transferred) due to an exceptional number of natural catastrophes.

Excellent but reduced business profile--AXA Re has historically enjoyed an excellent business profile, which is now considerably reduced after a sharp 80% premium reduction over the last three years. A.M. Best believes that AXA Re's business profile will remain excellent in its core lines of business, property and motor (65% of consolidated premiums), mainly in Europe and the United States. Total gross written premium is likely to stabilise at EUR 1,250 million (USD 1,490 million) as the decrease in property and motor rates will be offset by opportunistic increases in market share in some casualty and credit lines of business.

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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 http://www.ambest.com.