S&P: U.S. Commercial Lines Insurance Sector Outlook Revised To Negative From Stable

NEW YORK, Aug. 13, 2008--Standard & Poor's Ratings Services said today that it has revised its outlook on the U.S. commercial lines property/casualty insurance sector to negative from stable.

Standard & Poor's credit analyst John Iten explained that "our decision to revise the sector outlook reflects our concern over two issues, the ongoing decline in pricing for commercial lines and decreases in investment income."

Price competition persists across virtually all commercial lines, with prices continuing to decline, albeit at a somewhat moderated pace in the second quarter.

Based on industry pricing surveys and information that companies provided in their second-quarter earnings releases, we believe pricing in the second quarter for renewal business declined at a mid-single-digit rate in most lines and at a low-double-digit rate for new business.

"Although some companies and outside observers have suggested that the rate of deterioration might have bottomed out in the second quarter, rates are still declining steadily," Mr. Iten said. "Absent an extraordinary event, we do not see anything reversing the general downward direction of rates over the next six to 12 months."

For a complete copy of S&P's news release, please contact Jeff Sexton, New York, (1) 212-438-3448, jeff_sexton@standardandpoors.com

Analyst Contacts:
John Iten, New York (1) 212-438-1757
Thomas Upton, New York (1) 212-438-7249
Damien Magarelli, New York (1) 212-438-6975
Polina Chernyak, New York (1) 212-438-7179