A.M. Best's Insurance Stock Index Criteria

A.M. Best's Stock Indexes reflect the trading patterns of equities issued by companies worldwide whose primary business is insurance. As such, the indexes provide a useful benchmark for assessing investor confidence that often correlates with general financial performance of:

• The overall insurance industry;
• A specific insurance business segment; and
• A specific company in the context of its business segment.

The free float market capitalization weighted indexes are comprised of all insurance industry companies that are publicly traded¹ on major global stock exchanges that also have an interactive Best's rating, or that have an insurance subsidiary with an interactive Best's Rating. The exceptions are the insurance brokers indexes (AMBUB and AMBGB), which are not rated by A.M. Best. The index family consists of one overall global industry composite and 14 regional and/or business segment specific sub-indexes. These indexes and their respective ticker symbols are:

• A.M. Best's Global Insurance Index [AMBG]

• A.M. Best's Global Reinsurance Index [AMBGR]

• A.M. Best's Global Multi-Line Insurance Index [AMBGML]

• A.M. Best's Global Non-Life Insurance Index [AMBGNL]

• A.M. Best's Global Life Insurance Index [AMBGL]

• A.M. Best's Global Insurance Brokers Index [AMBGB]

• A.M. Best's Europe Insurance Index [AMBEUR]

• A.M. Best's Asia/Pacific Insurance Index [AMBAP]

• A.M. Best's U.S. Insurance Index [AMBUS]

• A.M. Best's U.S. Multi-Line Insurance Index [AMBUML]
• A.M. Best's U.S. Property/Casualty Insurance Index [AMBUPC]
• A.M. Best's U.S. Life and Health/HMO Insurance Index [AMBULH]
• A.M. Best's U.S. Life Insurance Index [AMBUL]
• A.M. Best's U.S. Health and HMO Insurance Index [AMBUH]

• A.M. Best's U.S. Insurance Brokers Index [AMBUB]

Each index is based on the aggregation of the prices of the individual publicly traded stocks, converted to U.S. dollars, and weighted for their respective free float market capitalizations.  Quotes on index levels are available with a 20 minute lag from live trading, at www.ambest.com/stocks and from most stock quotation services.  Each index also is available in a total return version, with the index closing level available at the end of the U.S. trading day (see Total Return Indexes Q&A).  Total return indexes have the same ticker symbol as the underlying price index, with an appended "T".  For example, A.M. Best's Global Reinsurance Index [AMBGR] on a total return basis has the ticker symbol AMBGRT.

Calculating Index Values

Each stock is assigned to subsidiary indexes based on the location of the exchange on which it is primarily traded, and by the company's primary business. Primary business is determined by latest year-end net premiums written (NPW). Stocks assigned to the Multi-Line Indexes have 11% or more of annual NPW generated by insurance segments other than their primary insurance business.

Weightings of underlying stocks in each segment are adjusted as needed for occasional additions and deletions due to market entry or market departure, stock issuance or repurchases, stock splits, mergers or acquisitions, and changes in status of a company's interactive Best's Rating. The value of each segment is indexed to December 31, 2004 = 1000.00. Total return indexes are calculated including dividend payments and reinvestment of same.  The indexes are calculated by Dow Jones Indexes using the methodology detailed at the following link:
http://www.djindexes.com/globalindexes/?go=literature.

Guidelines

Issues included in A.M. Best's Stock Indexes must meet certain guidelines established by A.M. Best. Component stock issues are selected based on the following qualifications:

• The primary business of the publicly traded company must be insurance related;
• The company, or a subsidiary operating insurer of the public company, must have an interactive Best's Rating (excluding companies in the Brokers indexes);
• The stock issue must be actively traded on a major global stock exchange.²

Stocks are removed from an index in the event of:

• Withdrawal of the underlying interactive Best's Rating of the listed company or its subsidiary operating insurer;
• Bankruptcy or financial impairment of the company;
• Delisting by its exchange;
• A significant change in its primary business (possible shift in segment index).

Transparency

Transparency in both methodology and underlying data is a paramount consideration for each A.M. Best Stock Index. A.M. Best regularly reviews the indexes' composition and guidelines.

Notes:

¹ There is no measure included that reflects the value of the non-stock insurance companies. In the United States, non-stock companies accounted for 40% of the property/casualty and 21% of the life/health net premiums written in 2004.

² A publicly traded company generally is grouped by the location of primary exchange on which it is traded.