Standard & Poor's Ratings Services said yesterday that it affirmed its 'A+' counterparty credit rating on PartnerRe Ltd. and its 'AA' counterparty credit and financial strength ratings on PartnerRe Ltd.'s core subsidiaries.

But it assigned a negative outlook to the PartnerRe group, saying that its capital adequacy remained below its ratings level and its operating levels were below the AA rating requirement.

Standard & Poor's also said that it withdrew its 'Api' counterparty credit and financial strength ratings on PartnerRe Insurance Co of New York at the request of management.

Standard & Poor's took this rating action as part of its initiative to eliminate possible confusion concerning the assignment of pi ratings to companies that are part of interactively rated groups. Although Standard & Poor's interactive ratings include a review of the entire group, the companies had not specifically requested that Standard & Poor's assign these pi ratings, and maintaining pi ratings on these companies might wrongly imply that Standard & Poor's has access only to public information on them.

"Although the consolidated organisation demonstrated strong operating performance in 2002, it remains subject to large losses and is still building a profitable base in some of its diversified lines," noted Standard & Poor's credit analyst Karole Dill Barkley.

Key rating strengths are very strong operating cash flow of $687 million for 2002, the significant growth in business volume at a profitable stage in the business cycle, and strong capital adequacy. Offsetting these strengths are reduced capital adequacy because of growth in premium and exposure. Quality of capital is good, with low debt leverage but high reliance on perpetual preferred shares.

The consolidated organisation's capital adequacy is below that of the rating range, and operating earnings for the reinsurance sector are below the expectations for the 'AA' rating level. The group is expected to maintain strong operating performance, with an ROR of 10-15 percent or more in low-catastrophe-loss years. Capital adequacy is expected to return to the rating range through earnings in 2003.

@EDITRULE:

PartnerRe Ltd. (NYSE:PRE) announced yesterday that, as of February 25, 2003, Sir Robert Horton has chosen to retire from PartnerRe's Board of Directors as a result of the increased responsibility in his current capacity as Chairman of Chubb plc., the worldwide security services provider.