The ratings on the core entities of the Switzerland-based Zurich Financial Services group (collectively referred to as ZFS) reflect ZFS' strong recovery in underlying earnings, a positive view of management, a very strong business position, and strong capitalization. These positive factors are partly offset by the unexpected high need for further reserve strengthening at Centre Solutions (Bermuda) Ltd. (A+/Watch Neg/--) and related entities (collectively Centre). Strong recovery in underlying earnings. Management's ongoing efforts to improve ZFS' operating profitability will allow the group to achieve an earnings level that is reflective of its very strong business position. ZFS has already demonstrated significant improvements in its underlying profitability in 2003. In the first nine months of 2003, group operating profit leapt to
