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Moody's Insurance Financial Strength Rating for Hannover Re

Hannover, 16 December 2002:

Rating agency Moody's Investors Service, Inc. announced today that it has put its insurance financial strength rating (A2) for Hannover Re under "review", this does not preclude further downgrading. Moody's has justified this move, inter alia, by suggesting that Hannover Re's capital resources are not adequate in view of its strong premium growth.

As stated by Hannover Re, Moody's relatively poor rating not only diverges significantly from the assessment of the other leading rating agencies, it is also based on an entirely different level of information and degree of insight.

The two leading rating agencies for the worldwide insurance and reinsurance industry, Standard & Poor's and A.M. Best, have each awarded Hannover Re their second-highest rating of AA ("Very Strong") and A+ ("Superior") respectively over a period of more than ten years. Both ratings were recently confirmed.

Throughout all these years, as the company explained, the ratings awarded have been based on detailed information. Hannover Re's Executive Board and its senior management have granted both agencies an in-depth insight into the company's net assets, financial position and results of operation, usually making available information that is normally confidential, such as business plans, strategic objectives and expectations regarding future developments, most notably the exceptionally high quality of the loss reserves and other provisions. This extensive insight, together with publicly available information, has formed the sound basis of Standard & Poor's and A.M. Best's evaluation of Hannover Re's financial strength, profitability and market position.

Some time ago Moody's also began, on an unsolicited basis, to draw up a insurance financial strength rating for Hannover Re. Moody's opinion is based on publicly available information and quantitative assessments. Moody's does not have access to more extensive additional management information. Consequently, the rating is considerably less well-founded than the ratings awarded by Standard & Poor's and A.M. Best.