S&P Downgrades Alea

Standard & Poor's Ratings Services said today it placed its "A-minus" long-term counterparty credit and insurer financial strength ratings on Alea Europe AG, Alea (Bermuda) Ltd., Alea Global Risk Ltd., Alea Jersey Ltd., Alea London Ltd., Alea North America Insurance Co., and Alea North America Specialty Insurance Co.--the operating entities that comprise the Alea group (Alea)--on CreditWatch with negative implications.

At the same time, S&P withdrew its "BBB-minus" long-term counterparty credit rating on the group's intermediate holding company, Alea Group Holdings AG, following its recent cessation as a legal entity.

Alea Group Holdings Ltd. in Bermuda, specialty insurer and reinsurer, said today it has been notified that S&P is placing it's "A-minus" counterparty credit and insurer financial strength ratings on the operating entities that comprise the Alea group on CreditWatch with negative implications.

Alea indicated it will discuss concerns with S&P early next week.

Simon Marshall, S&P credit analyst, said the CreditWatch placement follows yesterday's announcement of Alea's results for the first half of 2005, "which did not meet the expectations of S&P's or Alea's management and continued the disappointing operating performance trend of recent years."

The continuing negative influence of adverse reserve development on performance is a particular concern after the substantial reserve-strengthening actions taken at the 2004 year-end, and management credibility has been called into question accordingly. Strong capitalization continues to underpin the ratings, however.

S&P said it will meet with Alea management within the next week to resolve the CreditWatch placement. If, upon resolution of the CreditWatch placement, S&P decides to lower Alea ratings, it is not expected they will be lowered more than one notch.