Press Release - JUNE 15, 2009

A.M. Best Affirms Ratings of Bosna Reosiguranje d.d. Sarajevo (Bosna Re)


CONTACTS:
 Analyst(s)
Anna Orlovskaya
+(44) 20 7626 6264
anna.orlovskaya@ambest.com

Carlos Wong-Fupuy
+(44) 20 7626 6264
carlos.wong-fupuy@ambest.com
Public Relations
Jim Peavy
+(908) 439-2200, ext. 5644
james.peavy@ambest.com

Rachelle Morrow
+(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK, N.J. - JUNE 15, 2009
A.M. Best Co. has affirmed the financial strength rating of B+ and the issuer credit rating of "bbb-" to Bosna Reosiguranje d.d. Sarajevo (Bosna Re) (Bosnia and Herzegovina). The outlook for both ratings is stable.

The ratings of Bosna Re reflect its strong risk-adjusted capitalisation, stabilising underwriting performance and dominant domestic business position.

A.M. Best believes that Bosna Re's risk-adjusted capitalisation is strong and is supportive of the company's business growth in the next few years. Bosna Re's capital level is well protected by a comprehensive retrocession programme, which is placed with companies with secure ratings.

Bosna Re's underwriting performance became more stable in 2008 and showed positive results, with a moderate combined ratio of 92.6% and a loss ratio of 59.8% (61.1% in 2007). Going forward, A.M. Best expects less volatility in underwriting performance (which was experienced in past years prior to 2007). However, the newly implemented reserving system is yet to be tested fully. Adoption of International Financial Reporting Standards also has been completed, which A.M. Best views as a positive step towards consistency in presentation of the results.

A.M. Best believes that Bosna Re's overall performance will continue to be positive (BAM 3 million in 2008) and is likely to be derived from both investment income and underwriting income.

A.M. Best is of the opinion that Bosna Re has a strong position in the domestic market, having generated a healthy premium of BAM 48.5 million in 2008. A.M. Best believes that Bosna Re is likely to experience the similar premium volumes in the next two years.

The company's insurance portfolio mix is quite limited and mostly dominated by two main traditional types of insurance: motor (36% of gross premiums written) and property (42% of gross premiums written). A.M. Best does not anticipate any major changes of the portfolio composition in the next two years.

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.


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AMB# Company Name
088596 Bosna Reosiguranje d.d.