Fitch Places Brandywine Holdings’ Subs IFS Ratings on Watch Negative

CHICAGO--(BUSINESS WIRE)--Nov. 3, 2004--Fitch Ratings has placed the 'B+' insurer financial strength (IFS) ratings of the three domestic insurance subsidiaries of Brandywine Holdings on Rating Watch Negative. (See below for a detailed rating list.)  
 
Today's rating action does not affect either the ratings or Rating Outlook of any other ACE subsidiaries. Additionally, today's rating action does not reflect an ongoing investigation by the New York Attorney General's office into insurance brokerage and sales practices. The Brandywine companies have not actively sold policies since a restructuring in 1996 and Fitch believes it is highly unlikely that the Brandywine companies will be directly affected by the attorney general's probe.  
 
The ratings were placed on Rating Watch pending the results of the company's most recent biennial reserve review, which is currently underway and expected to be completed in the 4th quarter. Brandywine is required to produce these reviews under the terms of a 1996 restructuring agreement. Fitch believes that if a large reserve increase was to occur, it would be more likely to occur during the year of the biennial reserve review than in the off-years.  
 
The Rating Watch also reflects a continued decline in assets, decreased liquidity and increased consumption of the protection provided by affiliate operations through the aggregate excess of loss contract. The amount of cover available from the active companies declined modestly to $332 million at year-end 2003 from $334 at year-end 2002.  
 
Brandywine Holdings is an intermediate holding company that is ultimately owned by ACE Limited (ACE). Brandywine Holdings and INA Holdings, another intermediate holding company, together comprise the domestic operations of INA Financial, their parent, and represent the domestic property/casualty insurance operation that ACE purchased from CIGNA Corporation in 1999. INA Holdings owns the 19 insurance companies that represent the group's active insurance operations. Brandywine Holdings owns the three domestic insurance companies which are inactive, runoff operations now largely consisting of asbestos and environmental claims. The two groups were separated in a 1996 restructuring. However, the groups remain linked through an aggregate excess of loss agreement. The excess of loss agreement originally provided Century Indemnity, the lead inactive company, with up to $800 million of support for either net worth maintenance or liquidity needs though, at the current time, somewhat more than half of the cover has been utilized on an incurred basis.  
 
The ACE Group of Companies is one of the world's largest providers of property and casualty insurance and reinsurance. Headquartered in Bermuda, ACE provides a diversified range of products and services to clients in nearly 50 countries around the world. Entity/Issue/Type Action Rating/Outlook 
 
ACE American Reinsurance Company 
 
Century Indemnity Company 
 
Century Reinsurance Company 
 
-- Insurer financial strength Rating Watch Negative 'B+' 
 
Contacts  
 
Fitch Ratings 
 
Donald F. Thorpe, CPA, CFA, 312-606-2353, Chicago