A.M. Best Assigns Ratings to East Africa Reinsurance Company Limited

OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has assigned a financial strength rating of B (Fair) and issuer
credit rating of "bb+" to East Africa Reinsurance Company Limited (EARe)
(Kenya). The outlook for both ratings is stable.

The ratings of EARe reflect its solid level of risk-adjusted capitalisation and
stable overall profitability. Offsetting factors are the company`s vulnerable
competitive market position, restricted opportunities for growth and marginal
underwriting profitability.

In A.M. Best`s opinion, EARe`s current level of risk-adjusted capitalisation is
solid and benefits from a relatively good level of capital and surplus. The
company`s capital position has been strengthened over the past three years
through the full retention of profits. Although dividend payments are expected
in future years, A.M. Best anticipates that risk-adjusted capitalisation will be
maintained at a solid level in both 2009 and 2010. Furthermore, EARe`s capital
position benefits from adequate outwards reinsurance protection and a
conservative investment portfolio.

Although EARe has achieved a relatively stable return on equity within the range
of 7.4% and 10% between 2006 and 2008, profits have been reliant on investment
income. Small underwriting profits have been achieved in recent years; however,
the company`s combined ratio has been above 100% in two of the past three years.

A.M. Best believes that EARe maintains a relatively weak competitive position
within both its domestic Kenyan reinsurance market and overseas. Alongside the
legal cessions commanded by several of EARe`s rival reinsurers, price-based
competition has historically been a challenge and limited growth opportunities
exist. Furthermore, A.M. Best considers that the company has a moderately
concentrated business profile, with a little over 40% of premium income
generated from its top five cedants.

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 Company
Analysts
Timothy Prince, +(44) 20 7626 6264
timothy.prince@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