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Date: Thursday, 18-Dec-97 09:46:37 GMT
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Best's Rating Changes - May 27, 1997

The following has been reproduced in its entirety
from the BEST'S RATING CHANGES article
in the May 27, 1997 issue of BESTWEEK - P/C.
Transatlantic Holdings Inc. Group, New York, had its Best's Rating raised from
"A+" (Superior) to "A++". The rating applies to the group's two-member pool, led by
Transatlantic Reinsurance Co. The rating reflects the group's superior operating
performance, strong capitalization, and leading position in the broker reinsurance markets.
These positive rating factors are derived from the group's recognized specialty risk
underwriting expertise, well-established and growing global franchise and long-standing
strategic relationship with American International Group (AIG). In addition, the group
maintains competitive advantages in terms of its lower expense structure, diversified
product offering, substantial line capacity and its access to AIGs vast global market
network.
Despite significant market competition and stable premium production in its domestic
book, Transatlantic continues to experience market momentum by capitalizing on
international market opportunities, demonstrating the groups tremendous operating
flexibility and ability to sustain consistently favorable earnings trends. Finally, the parent
holding company is debt free, providing substantial financial flexibility to support the
group's controlled growth strategies.
Offsetting these strengths is Transatlantic's above-average underwriting leverage position.
This concern, however, is mitigated by the group's higher proportion of loss-sensitive
business, consistently favorable loss-reserve development and absence of meaningful
exposure to asbestos and environmental liabilities.
Since 1992, the group's pretax return on revenue has been outstanding at 14%,
outperforming its peers by four points. Transatlantic's exceptional earnings are derived
from the group's disciplined underwriting approach, low overhead costs and highly
diversified reinsurance book, which have fostered strong capital generation to support its
growing book of business. Transatlantic's rating outlook is stable, reflecting its sustainable
competitive advantages and ability to further capitalize on flight to quality trends in the
global reinsurance marketplace.
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