[2] S&P Affirms Pennsylvania National Mutual 'BBBpi' Rtg.NEW YORK--(BUSINESS WIRE)--Nov. 24, 1999-- (Standard & Poor's CreditWire)--Standard & Poor's today affirmed its triple-'Bpi' financial strength rating on Pennsylvania National Mutual Casualty Insurance Co. Pennsylvania National Mutual Casualty Insurance Co. (Pennsylvania National Mutual) is a regional property and casualty insurer licensed in 43 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . The company writes personal and commercial automobile insurance and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. insurance. Headquartered in Harrisburg, PA, it commenced operations in 1920. The company and its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Penn National Security Insurance Co. (Penn National Security), together form the Penn National Insurance Penn National Insurance is a property-casualty insurance company, headquartered in Harrisburg, Pennsylvania. Founded in 1919 by the Pennsylvania Farmers and Threshermen's Mutual Protective Association, under the name Pennsylvania Threshermen's and Farmer's Mutual Casualty Company, Group. The companies participate in a pooling agreement. Pennsylvania National Mutual, as the lead company in the interaffiliated pooling arrangement, assumes all combined premiums, losses and expenses and cedes 50% of the business to Penn National Security. All business written in New Jersey is excluded from the pool and is retained by the parent, Pennsylvania National Mutual. In addition, a common management structure is in place between the companies. Major Rating Factors: -- Capitalization for the interaffiliated pool is very strong at 163% at year-end 1998, as measured by Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index capital adequacy model. -- Although the interaffiliated pool has displayed a history of volatility in premium income, net premiums written increased 4% in 1998 to $354 million from $339 million in 1997. -- The interaffiliated pool displays a narrow geographic and product scope. The majority of the business written is in the mid-Atlantic and southern Atlantic states. Geographic and product line concentration can expose a company to regulatory and competitive risk. -- At 70% of surplus, reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. recoverable from nonaffiliates is higher that of higher-rated companies. -- Operating performance for the interaffiliated pool is very weak, with the average return on revenue from 1993 to 1998 at less than 1%. Earnings for the interaffiliated pool are somewhat volatile due to adverse weather conditions in the mid-Atlantic and southern Atlantic states. -- Reserve development for the interaffiliated pool displayed more volatility than for higher rated companies. 'Pi' ratings, denoted with a 'pi' subscript (1) In word processing and scientific notation, a digit or symbol that appears below the line; for example, H2O, the symbol for water. Contrast with superscript. (2) In programming, a method for referencing data in a table. , are insurer financial strength ratings based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. 'Pi' ratings are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a 'pi' subscript are not subject to potential CreditWatch listings. Ratings with a 'pi' subscript generally are not modified with 'plus' or 'minus' designations. However, such designations may be assigned when the insurer's financial strength rating is constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by sovereign risk Sovereign Risk The risk that a foreign central bank will alter its foreign-exchange regulations thereby significantly reducing or completely nulling the value of foreign-exchange contracts. or the credit quality of a parent company or affiliated group, Standard & Poor's said. -- CreditWire Copyright 1999, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion