ACE Group, which consists of ACE Bermuda Insurance Ltd. and ACE Tempest Reinsurance Ltd, has received an affirmed financial strength rating (FSR) of A+ (superior) and the issuer credit ratings (ICR) of aa- by AM Best Co.

Additionally, AM Best has affirmed the FSRs of A+ (superior) and the ICRs of aa- of ACE Westchester Specialty Group (New York) and ACE American Pool (Pennsylvania) and their members, as well as ACE Tempest Life Reinsurance Ltd. (Bermuda).

Concurrently, AM Best has affirmed the FSR of A (excellent) and the ICR of a of ACE Life Insurance Co. (ACE Life) (Connecticut) and the FSR of B- (fair) and ICRs of bb- of Brandywine Group (Pennsylvania) and its members. The FSR of A+ (superior) and ICR of aa- of ACE European Group Ltd. (UK) are unchanged.

AM Best also has upgraded the FSR to A+ (superior) from A (excellent) and the ICR to aa- from a of ACE INA Insurance (Canada).

In addition, A.M. Best has affirmed the ICRs and senior debt ratings of a- of ACE Ltd. (Cayman Islands) and ACE INA Holdings Inc. (Delaware) and withdrawn the short-term commercial paper ratings of AMB-2 of ACE and ACE INA Holdings Inc. These rating actions are in conjunction with ACE's strategic retirement of its commercial paper program and corresponding bank credit facilities.

AM Best has also affirmed the debt ratings of bbb on preferred securities of ACE Capital Trust II and the indicative ratings on securities to be issued under ACE's shelf registration program. The outlook for all ratings is stable.

The affirmation of the ratings of ACE Group and the US subsidiaries reflects an organisation that is well diversified by business segment and geographics, well capitalised with a stable balance sheet, maintains the capacity to generate significant earnings within a difficult pricing environment in many of its domestic and overseas markets, is committed to a comprehensive enterprise risk management (ERM) structure and has an experienced management team.

AM Best believes that ACE's overall risk and catastrophe specific exposures are well managed through comprehensive company-wide risk assessment and catastrophe modeling coupled with good data quality, the use of appropriate policy limits within the company's business model framework, above-average risk appetite and capital position.

Earnings generating capability and stability are supported by a conservative reserving philosophy and a company-wide culture and commitment to underwriting profitability providing a foundation for its ERM program to be successful.

The underwriting commitment is imperative given that ACE is by design an above average risk accepting company whose stability rests on the ability to properly understand and appropriately price its property and casualty exposures.

With regard to capital management, ACE maintains substantial capital levels in its Bermuda operations, while capital levels in other operating subsidiaries are sufficient to meet AM Best rating requirements. Operating subsidiary capital levels are protected by internal reinsurance arrangements with ACE affiliates, primarily in Bermuda.

AM Best has incorporated the capital management strategy and, as a result, provides rating enhancement to a number of major ACE operating subsidiaries.

ACE maintains a structured and exceptionally comprehensive ERM program, which includes economic capital modeling and addresses the concerns of risk aggregation across business divisions, establishment of accumulation guidelines, analysis and mitigation of external threats, communication to profit centers of definition of risk, risk tolerance and limits, strategic credit risk, cycle management, and monitoring of risk control processes.

The ERM program is constantly evolving, and included in 2007 was operational risk, M&A, regulatory and policyholder behavior risk. AM Best believes there is a strong management commitment and provision of appropriate resources to this program supported by intellectual capital.