Fitch Upgrades Reaseguradora Patria's IFS Rating To 'BBB+'

New York-27 February 2007: Fitch Ratings has upgraded the international scale insurer financial strength (IFS) rating of Reaseguradora Patria, S.A. (Patria) to 'BBB+' from 'BBB'. At the same time, Patria's national-scale IFS rating was upgraded to 'AAA(mex)' from 'AA(mex)'. The Rating Outlook is Stable.

The upgrade in Patria's ratings reflects its gradually improving financial profile and the ability to face an increasingly challenging operating environment within its main markets, namely Mexico and Latin America. The ratings also consider sustained adequate earnings, tight management of underwriting risks and ample liquidity. In turn, rating constraints include the company's relatively small size and capital base; increased competition; higher-than-average exposures to property catastrophe losses; and heavy reliance on retrocession and excess loss (XL) protections as risk management tools.

In the past years, the regional insurance market has experienced several challenges, including adverse global events and severe catastrophes (ie, September 11, Katrina, Wilma) and an increasing portion of ceding companies being acquired by global insurers. Patria has shown resilience and adequate ability to adapt to these changing conditions, maintaining a good competitive position, a gradually improving financial performance and a steadily increasing capital base, which largely explains this rating upgrade.

Going forward, the company should sustain these improvements and further strengthen its financial
profile. Patria's major challenges are its small size and high regional concentration relative to global
competitors, as well as its high expense and combined ratio arising from retro and XL costs. Fitch
considers that further upgrades in Patria's ratings will depend on its ability to successfully overcome
these constraints.

Reaseguradora Patria is a Mexican property/casualty reinsurance company, whose main business
lines are Fire, Marine & Cargo, Life, Bonds and Miscellaneous. In 2006, the company sold its majority stake in Venezuelan reinsurance company Delta. At end-September 2006, Patria's capital and capital reserves (CCR) amounted to roughly US$120 million.

Fitch upgrades the following, with a Stable Outlook:
--Insurer financial strength rating (IFS) to 'BBB+' from 'BBB';
--National-scale IFS rating to 'AAA(mex)' from 'AA(mex)'.