Standard & Poor's Affirms A+ Financial Strength Ratings on ACE Ltd.'s Units

Standard & Poor's affirmed its 'A'-plus counterparty credit and financial strength ratings on A.C.E. Insurance Co. Ltd., Corporate Officers and Directors Assurance Ltd., and Tempest Reinsurance Co. Ltd.

The ratings action follows the announcement of ACE Ltd.'s acquisition of Tarquin Ltd for stock consideration of approximately 14.3 million shares, subject to final acquisition adjustments. United Kingdom-based Tarquin is an integrated Lloyds of London operation, including the Charman Underwriting Agencies (offering 250 million pounds sterling of 1998 Lloyds capacity) and a corporate capital vehicle—Syndicate 2488. Charman manages Syndicates 2488 and 488 in parallel, with Tarquin corporate capacity funded through 2488 and names and other capacity funded through 488. We expect that this acquisition will be accounted for as a pooling of interests at net book value.

The purchase of Tarquin is consistent with the ACE Group acquisition strategy, and was incorporated into the existing rating.

Standard & Poor's expects ACE to achieve 20% average return on revenue in the medium term, and to continue to pursue growth through acquisition.