Fitch Affirms `A+' IFS Ratings on R.V.I.

Business Editors

CHICAGO--(BUSINESS WIRE)--June 29, 2001

Fitch has affirmed the `A+' insurer financial strength ratings of R.V.I. Guaranty Co. Ltd. (R.V.I. Guaranty) and its subsidiary, R.V.I. America Insurance Co. (R.V.I. America), referred to together as R.V.I.

The Rating Outlook is Stable.

R.V.I. is the largest insurance company specializing in underwriting and marketing residual value insurance risks worldwide for clients including major financial institutions, leasing companies and equipment manufacturers. Current ownership of R.V.I. Guaranty is split evenly between wholly owned subsidiaries of Quantum Industrial Partners, LDC and CNA Financial Corp.

Rationale for the rating includes R.V.I.'s dominant market position in the residual value insurance industry, solid overall underwriting performance, good capitalization and quality management team. Partially offsetting these positives are continued competition from new market entrants, concentration among key insureds, and some remaining uncertainty associated with the recent expansion of the real estate line.

R.V.I. is recognized as a leader and long-term provider of residual value coverage, particularly in passenger vehicle and commercial equipment for FASB coverage purchased to obtain favorable accounting treatment. Due to very conservative underwriting standards and extensive management experience with the assets underwritten, losses have been minimal and operating results have been very favorable with combined ratios under 100% in recent years.

Nevertheless, R.V.I. does have high concentration risk in that the top five clients accounted for about 60% of gross written premiums in both 1999 and 2000. However, this risk is somewhat mitigated by the fact that most key relationships are long-standing and the number of clients has been increasing in the recent past.

Since 1998, R.V.I. has also expanded more into the real estate line, which now accounts for almost one-fourth of the company's gross written premiums and provides the most pure asset risk (non-FASB) premiums for R.V.I. Although there is still some uncertainty associated with this expansion, Fitch believes that the risk is low given the conservative underwriting of the real estate business. In addition, it helps to provide a more diverse and stable source of revenue, which could prove beneficial should FASB coverage subside.

Entity/Issue/Type               Action        Rating/Outlook
R.V.I. Guaranty Co. Ltd.
--Insurer financial strength   Affirmed         `A+'/Stable.

R.V.I. America Insurance Co.
--Insurer financial strength   Affirmed         `A+'/Stable.