Guy Carpenter Introduces Capital Benchmarking Tool to Assist European

Guy Carpenter Introduces Capital Benchmarking Tool to Assist European Clients with Solvency II Preparations

    Business Editors/Insurance Writers

    MUNICH, Germany--(BUSINESS WIRE)--Jan. 6, 2005--Guy Carpenter & Company, Inc., the world's preeminent risk and reinsurance specialist and a part of the Marsh & McLennan Companies, Inc. (NYSE: MMC), today announced the introduction of Capital Adequacy Projector (CAP), a capital benchmarking tool designed to help clients prepare for the anticipated regulatory changes as a result of the European Union's Solvency II directives.
    "While the Solvency II directives are not expected to be announced until 2006, they may have far-reaching impact in terms of how European insurers view, manage and disclose the risks they face. Accordingly, those who begin planning early will have the most flexibility to evaluate available options and establish appropriate systems and procedures. Since CAP provides a reasonable view as to what insurers may face under Solvency II, it's a logical first step," said David Lightfoot, a Managing Director responsible for Guy Carpenter's Instrat(R) unit in Europe and Asia Pacific.
    CAP was developed as a result of analysis conducted by Guy Carpenter that suggests that regulatory systems and capital adequacy models around the world are converging and that existing capital adequacy models might be a reasonable predictor of Solvency II requirements. This analysis was first presented in a paper published in August 2004, Convergence in Capital Adequacy Measures and Financial Reporting Rules, which is available by contacting marketing@guycarp.com
    To assist the evaluation of target capital under Solvency II, CAP provides estimates for the following regulatory and rating agency capital benchmarks:

--	the United Kingdom's Enhanced Capital Requirement (ECR)
--	Australia's Minimum Capital Requirement (MCR)
--	the United States' Risk-Based Capital (RBC)
--	Standard & Poor's European Capital Adequacy Ratio (SPCAR)
--	A.M. Best's Capital Adequacy Ratio (BCAR)

    "Since there appears to be some convergence of methodology and ultimate capital adequacy amounts among these models, CAP may help clients gauge how their capital may compare to the potential Solvency II requirements. CAP can also estimate the impact of reinsurance on each of the estimated target capital amounts, enabling an analysis of how reinsurance might impact capital adequacy," added Frank Achtert, a Munich-based Senior Vice President and specialist in accounting and finance.
    To learn more about CAP, contact David Lightfoot in London at david.m.lightfoot@guycarp.com or Dr. Frank Achtert in Munich at frank.achtert@guycarp.com.

    Guy Carpenter & Company, Inc. is the world's leading risk and reinsurance specialist and a part of the Marsh & McLennan Companies, Inc. Guy Carpenter creates and executes reinsurance and risk management solutions for clients worldwide through more than 2,400 professionals across the globe. The firm's full breadth of services includes 16 centers of excellence in Accident & Health, Agriculture, Alternative Risk Transfer, Environmental, General Casualty, Investment Banking(*), Life & Annuity, Marine & Energy, Professional Liability, Program Manager Solutions, Property, Retrocessional, Structured Risk, Surety, Terror Risk, and Workers Compensation. In addition, Guy Carpenter's Instrat(R) unit utilizes industry-leading quantitative skills and modeling tools that optimize the reinsurance decision-making process and help make the firm's clients more successful. Guy Carpenter's website address is www.guycarp.com.

(*)Securities are offered in the United States through MMC Securities Corp., Member NASD/SIPC. MMC Securities Corp. is an affiliate of Guy Carpenter & Company, Inc.

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CONTACT: Guy Carpenter Karen Griffiths, 917-937-3215 karen.griffiths@guycarp.com or Miller DeMartine Group Joanne Lessner, 212-222-7436 jlessner@mdgpr.com

KEYWORD: AUSTRALIA GERMANY UNITED KINGDOM INTERNATIONAL EUROPE ASIA PACIFIC INDUSTRY KEYWORD: INSURANCE GOVERNMENT SOURCE: Guy Carpenter & Company, Inc.

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