ERC Financial Strength Ratings Affirmed by A.M. Best; Ratings Action Validates Company's Turnaround.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--June 15, 2004

A.M. Best today affirmed the "A" (Excellent) rating of GE's Employers Reinsurance Corporation (GE ERC) and three of its U.S. entities, including Westport Insurance Corporation, First Specialty Insurance Corporation and GE Reinsurance.

The outlook for all remains Stable.

"Today's announcement is a validation of the way we continue to run this business with excellence," said Ron Pressman, Chairman, President and CEO of ERC. "We posted improved operating results with net income of $482 million in 2003 and boosted our balance sheet with an additional $1.4 billion in statutory surplus. This positions ERC to offer long-term security for its customers."

Despite concerns about capital availability in reinsurance and insurance markets, A.M. Best cited ERC's "excellent risk-adjusted capitalization, improving operating performance and its dominant market presence and distribution capabilities."

The rating agency also applauded the company's successful re-engineering of its risk portfolio, exiting unprofitable lines of business in favor of lines generating more favorable returns.

Despite an incrementally lower rating, Medical Protective, ERC Group's medical liability carrier also distinguished itself, earning a Stable outlook for its capitalization efforts, underwriting discipline and investment portfolio.

A.M. Best took note of Medical Protective's portfolio growth in support of its customers, together with additional reserves taken to pay obligations from recent accident years in revising its financial strength rating to "A-" from "A", still an "Excellent" rating.

"Medical Protective is a tremendous success story in a challenged medical malpractice market," said Pressman. "It continues to be one of the highest-rated physician liability carriers due to its capitalization, market leading presence, distribution capabilities, professional claims philosophy, improved underwriting performance and positive operating cash flows."

Also today, A.M. Best revised the rating of Coregis Insurance Company to "B+" (Very Good) from "A-" (Excellent). Prior to the ratings action, ERC had significantly reduced the volume of business it underwrites through Coregis when it sold the renewal rights of its Public Entity business to Argonaut.

"In order to maintain our competitive differentiation and provide the solutions our customers need, we will offer various types of paper with different ratings," said Pressman.

GE's Employers Reinsurance Corporation (NYSE: GE) is a company that protects lives, property and reputations. More information is available at www.ercgroup.com.