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Zurich SA AA+ rating maintained

14 December 2007 Zurich Insurance Company

International credit rating agency, Global Credit Ratings (“GCR”), has reaffirmed Zurich Insurance Company South Africa Limited’s (“Zurich SA”) claims paying ability rating of AA+ (double A plus). The rating is reflective of the insurer’s high claims paying ability.

Zurich SA is one of the strongest insurers in the South African market and is the holding company of various entities including short term insurance holdings in Botswana (100%), Zimbabwe (49%) and South Africa (including Zurich Risk Finance at 100%). The company’s rebranding to its current name (previously SA Eagle) was viewed positively as it implies a level of support from its parent company, Zurich Financial Services, which is internationally rated AA-. GCR Insurance Analyst Iris Pilane stated that the company’s change in organisational structure, affording the local entity global skills and product analysis platforms, will most likely increase its ability to underwrite larger risks than in the past. This is further supported by the insurer’s comprehensive reinsurance programme, which limits its largest potential loss to around 2% of 2006 shareholders capital.

Zurich SA’s international solvency margin rose to 55% in 2006. In addition, the company continued to reflect a statutory solvency margin that exceeds the minimum level, increasing to 35% from a previous 31%. The company’s largest risk exposure in 2006 related to motor insurance business, which given the high claims inflation (driven by increasing prices on motor parts and the Rand depreciation in 2006) pushed its overall loss ratio up by a significant 5.2% to 72.6% for the year. Notwithstanding, Zurich SA’s investment policy supported a rise in its claims cash coverage to 4 months.

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