A.M. Best Affirms Rating of Allied World Assurance Co. Ltd. and Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of Allied World Assurance Company, Ltd (AWAC) (Hamilton, Bermuda) and its reinsured affiliated companies.

Additionally, A.M. Best assigned an initial financial strength rating of A+ (Superior) to Allied World Assurance Company (Re) Ltd. (Ireland), which will become part of the AWAC group. The outlook for all the ratings is stable.

The rating reflects the company’s superior risk-based capitalization, solid operating performance, experienced management team and the strategic benefits received through associations with sponsoring organizations, such as American International Group (AIG) and The Chubb Corporation. AWAC has established a diversified book of business in commercial property and casualty lines, which includes general and professional liability insurance, as well as coverage on energy, transportation and commercial real estate property risks.

While AWAC was initially focused as a direct writer of such coverages, it has expanded to provide other specialty and reinsurance lines of business. Since inception, AWAC has successfully formed affiliates in both the United States and Europe. AWAC’s combined ratio of 87% through Sept. 30, 2003, continues to exhibit the benefits of higher market rates, light catastrophes and an unencumbered balance sheet while benefiting from associations with its sponsors. In particular, AIG affiliates provide AWAC with access to existing support platforms, underwriting expertise and established distribution networks.

Partially offsetting these strengths is competition from both established insurers and new capital that has entered the industry, potentially dampening expected returns if pricing of insurance coverage fails to meet anticipated levels. Furthermore, although A.M. Best recognizes the benefits that are provided as a result of AWAC’s strategic affiliation with its primary insurance sponsors, the ability of the company to effectively build and retain its initial favorable acceptance by the market will only be proven over time.

The financial strength rating of A+ (Superior) has been affirmed for Allied World Assurance Company Ltd and the following reinsured operating subsidiaries:

— Allied World Assurance (US) Inc.

— Newmarket Underwriters Insurance Company

— Allied World Assurance Company (Europe) Ltd

The financial strength rating of A+ (Superior) has been assigned to Allied World Assurance Company (Re) Ltd.