American Re Corporation Reports First Quarter Results

Princeton, New Jersey (May 9, 2006) -- American Re Corporation reported first quarter 2006 GAAP net income of $56.5 million, compared to $88.5 million in the first quarter of 2005. The decline in earnings was primarily attributable to higher interest expense on ceded funds held, mainly for the loss portfolio transfer reinsurance agreement executed in 2005 with Munich Re, the Company’s parent. At March 31, 2006, the statutory surplus of the Company’s reinsurance and insurance subsidiaries was $3.2 billion. The change represents a 3.6% increase from statutory surplus of $3.1 billion at December 31, 2005.

Gross premiums written for the first quarter of 2006 were $889.3 million compared to $954.1 million in 2005. The Company’s GAAP combined ratio for the first quarter was 97.3%, compared to 90.8% in 2005. The accident year combined ratio for the Company’s core business units was 96.8% for 2006, compared to 95.4% in 2005. The core results exclude non-core business operations and corporate retrocessions.

Commenting on the Company’s results, Chairman John Phelan said, “American Re’s first quarter earnings were in line with our expectations. Although the loss portfolio transfer had a dampening effect on current earnings, it also significantly strengthened the Company’s capital position as demonstrated by the NAIC Risk Based Capital ratio, which was in excess of 400% as of December 31, 2005 compared to 236% at the end of 2004.”

Safe Harbor Disclosure
The Company has disclosed certain forward-looking statements concerning its operations, economic performance and financial condition, including, in particular the likelihood of the Company’s success in developing and expanding its business and the risks related thereto. These statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company, and reflect future business decisions that are subject to change. Some of these assumptions inevitably will not materialize, and unanticipated events will occur which will affect the Company’s results. Such statements may include, but are not limited to, projections of premium revenue, investment income, other revenue, losses, expenses, earnings, cash flows, plans for future operations, common stockholder’s equity, investments, capital plans, dividends, plans relating to products or services of American Re, estimates concerning the effects of litigation or other disputes, adverse state or federal legislation or regulation, adverse publicity or news coverage or changes in general economic factors as well as the assumptions for any of the foregoing and are generally expressed with words, such as “believes,” “estimates,” “expects,” “anticipates,” “plans,” “projects,” “forecasts,” “goals,” “could have,” “may have” and similar expressions.

American Re Corporation, a member of the Munich Re Group, is one of the leading providers of reinsurance in the United States. Through its subsidiaries, it writes treaty and facultative reinsurance, insurance, and provides related services to insurance companies, other large businesses, government agencies, pools and other self-insurers. The Munich Re Group, whose business also includes primary insurance and asset management, has a preeminent position in the global reinsurance industry. It is headed by Munich Reinsurance Company of Munich, Germany, and includes reinsurance subsidiaries, branches, service companies and liaison offices in more than 60 locations worldwide, serving corporate clients from around 160 countries.