A.M. Best Comments on PartnerRe Ltd.’s Planned Acquisition of PARIS RE Holdings Limited

The transaction is valued at approximately $2.0 billion. The consideration will be the exchange of 0.3 of PartnerRe shares for each Paris Re share outstanding after the expected dividend distribution of approximately $ 310 million. The exchange offer will be structured in two steps. The first step, expected to be completed during the fourth quarter of 2009, entails PRE purchasing a majority ownership in Paris Re in a stock-for-stock exchange for the private equity investor’s approximately 60% stake in Paris Re, gaining board control. The second step, expected to be completed in the first quarter of 2010, entails an exchange offering for the remainder of Paris Re stock held by minority shareholders. The transaction is subject to customary regulatory and shareholder approvals.

A.M. Best believes that this transaction will further deepen PartnerRe’s geographic scope and operating scale. Paris Re maintains a strong balance sheet with the majority of its invested asset base held in fixed income securities of solid credit quality. Paris Re’s loss reserves prior to accident year 2006 are guaranteed by its former parent, AXA S.A., which somewhat mitigates the typical risks of acquiring an insurance company’s liabilities. A.M. Best does believe that there is integration, operational and treaty overlap risks associated with this transaction; however, given the relative size of Paris Re, these risks should be manageable.

The ratings reflect PartnerRe’s excellent business profile, strong risk-adjusted capitalization and strong enterprise risk management practices. PartnerRe is a global provider of multi-line reinsurance, and its competitive position benefits from diversification on both a geographic and product lines basis.

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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.

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