A.M. Best Affirms Ratings of Ocaso, S.A. Seguros y Reaseguros

OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and
the issuer credit rating of "aa-" of Ocaso, S.A. Seguros y Reaseguros (Ocaso)
(Spain). The outlook for both ratings is stable.

The ratings reflect the company`s superior risk-based capitalisation, excellent
operating performance and strong business profile. Partially offsetting these
factors are the dependence on the funeral expenses business line and the
exposure to interest rate risk for the life portfolio.

Ocaso`s risk-based capitalisation remains superior, having benefited from
significant profit retention in recent years. Ocaso`s capitalisation is further
supported by the full coverage of catastrophic events in Spain (reinsured by a
governmental company) and by the prudent investment strategy, with investments
mainly concentrated in fixed income securities (both government and high quality
corporate), only marginally affected by the financial markets crisis.

Ocaso`s profitability is strong, driven by the limited underwriting risk and low
volatility of its funeral expenses portfolio, and good and improving technical
results in other lines of business, especially accidents and assistance, with
the non-life combined ratio (CoR) below 90%. Total net profits amounted to EUR
47.9 million (USD 67.5 million) in 2008, which are still strong despite EUR 47.5
million (USD 67 million) of impairments. Due to unexpected losses in early 2009,
the CoR is anticipated to slightly deteriorate; however, in A.M. Best`s opinion,
it will remain healthy at around 90%.

Ocaso continues to be one of the leading providers of funeral expenses in Spain.
It is the company`s main line of business and contributes 43% to the combined
gross written premiums (GWP), amounting to EUR 768.6 million (USD 1,083.5
million) in 2008. Ocaso is endeavoring to diversify its policies portfolio,
expanding other non-life insurance business, specifically multi risks household,
and the high profitable accident and assistance. Life business accounted for 13%
of GWP in 2008, with an increase of 12.6% year on year despite higher
surrenders, an effect of the reduced customers` confidence due to the financial
markets crisis.

In A.M. Best`s opinion, assets and liabilities associated with the life segment
present a mismatch both in terms of interest rates and duration, mainly related
to the portion of "old" guaranteed policies. This exposes the company to market
and interest rate risks, especially in periods with low interest rates, like the
current one. However, in A.M. Best`s view, Ocaso is able to manage and mitigate
those risks considering, on one side, the limited size of the business involved
compared to the company`s overall business and, on the other side, the huge
availability of free capital, which provides the company with a safe cushion in
the event of adverse development of interest rates in the financial markets.
A.M. Best also takes a favourable view of the company`s strong enterprise risk
management, executed internally by an independent risk department, which
constantly monitors the risks for all lines of business.

For Best`s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any
additional methodologies and factors that may have been considered, can be found
at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating
organization dedicated to serving the financial and health care service
industries, including insurance companies, banks, hospitals and health care
system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
Lelio Lapresa, +(44) 20 7626 6264
lelio.lapresa@ambest.com
or
Carlos Wong-Fupuy, +(44) 20 7626 6264
carlos.wong-fupuy@ambest.com
or
Public Relations:
Jim Peavy, +1-908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, +1-908-439-2200, ext. 5378
rachelle.morrow@ambest.com

Copyright Business Wire 2009