SAGE LIFE OF AMERICA RATING
MEDIA RELEASE
OCTOBER 2002
SAGE LIFE OF AMERICA RETAINS A STRONG RATING
Despite the current volatile and negative rating environment in the United
States, Sage Life of America has retained a strong rating from AM Best, the
world`s oldest and most authoritative insurance rating and information
source.
AM Best has announced an A- (Excellent) financial strength rating for Sage
Life of America. In August, AM Best placed the company`s A (Excellent)
rating under review with negative implications following disclosure by Sage
Life of America of the need to raise long term capital in America for its
continued growth and development.
Both A and A- (Excellent) ratings are assigned by AM Best to companies that
have, on balance, excellent balance sheet strength and operating
performance.
Last week Sage announced that its international capital raising process was
proceeding according to plan and that Merrill Lynch`s New York based
investment banking group had been appointed as exclusive financial advisors
to Sage in connection with the development of a strategic transaction to
provide its international operations with adequate development funding.
At the same time Swiss Re Life and Health America Inc reiterated its
commitment to supporting Sage in the development of its North American
operation. Sage and Swiss Re will continue to work closely with each other
in the capital exercise and in overall interaction with distribution
partners, rating agencies and employees.
While these strategic alternatives are being developed, the rating remains
under review with developing implications. During the "under review"
period, AM Best will closely monitor Sage Life of America`s progress in the
development of a strategic transaction to provide it with adequate long term
funding. AM Best expects a definitive agreement will be reached by early
2003 and states that it is prepared to take further rating action should the
Sage Group fail to execute its strategic initiatives during that period.
AM Best states that the Sage Life of America rating reflects the companies
capitalization "which is strong relative to both AM Best`s risk-based
capital standards and the NAIC`s (National Association of Insurance
Commissioners) risk-based capital measures, and is more than adequate to
support the business short term."
"Furthermore, the company`s core product, variable annuities is less capital
intensive as the investment risk is passed on to the contract holder. Asset
supporting variable annuities are held in a separate account and are not
available to support the liabilities.
AM Best adds that Sage Life of America reinsures mortality risks and other
contract guarantees with highly rated reinsurers. Morevover Swiss Re Life
and Health continues to provide funding to cover all commission expenses
related to new business.
ENDS
DISTRIBUTED ON BEHALF OF SAGE BY CATHY FINDLEY PUBLIC RELATIONS ON (011)
463-6372
Date: 03/10/2002 04:50:00 PM Produced by the JSE SENS Department
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