[November 16, 2012]

A.M. Best Affirms Ratings of Torus Specialty Insurance Company and Torus National Insurance Company

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-" of Torus Specialty Insurance Company (Torus Specialty) and Torus National Insurance Company (Torus National). Both companies are domiciled in Wilmington, DE and are wholly owned subsidiaries of their ultimate parent, Torus Insurance Holdings Limited (Torus) (Bermuda). The outlook for all ratings is stable.

These ratings are based upon A.M. Best's criteria "Rating Members of Insurance Groups" and take into consideration the roles and strategic importance of Torus Specialty and Torus National to Torus' overall U.S. strategy. In addition, the ratings reflect the explicit support provided through substantial quota share reinsurance of Torus Specialty and Torus National's net business by their U.K- based affiliate, Torus Insurance (UK) Limited (Torus UK). Furthermore, Torus UK provides aggregate stop loss protection to Torus Specialty and Torus National. The ratings also acknowledge the implied support of future parental commitment.

Since the majority of its business is ceded to its U.K. affiliate, Torus Specialty and Torus National contine to maintain strong stand-alone capitalization, which is largely driven by their low net underwriting leverage.

A.M. Best will continue to closely monitor the operating performance of these relatively new companies that commenced business in 2009. As Torus Specialty and Torus National continue to gain economies of scale via growth, a critical component to maintaining their ratings will be management's ability to execute and generate profits in spite of the competitive market conditions and economic challenges that currently exist. Although uncertain as to the ultimate outcome, these ratings also consider Hurricane Sandy losses, which are expected to be minimal from both an earnings and capital perspective. Based on their group ratings, any future rating actions for Torus Specialty and Torus National will likely be in accordance with any future rating actions on Torus.

Factors that may lead to negative rating actions on Torus Specialty and Torus National could result from their continued sub-par operating results, a material deterioration in their stand-alone risk-adjusted capitalization and/or any lessening of support (implied or explicit) provided by Torus.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed in the rating process. Key criteria utilized include: "Rating New Company Formations." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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