A.M. Best Affirms "A-" (Excellent) Rating of Crown Life Insurance.

OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 15, 1997--Effective immediately, A.M. Best Co. has affirmed the "A-" (Excellent) rating of Crown Life Insurance Co., Regina, Saskatchewan. The rating is based upon Crown's stabilized earnings, significant improvement in asset quality, adequate capitalization and the financial support from its majority shareholder, Haro Financial Corp.

Crown Life's improved profitability reflects its lower operating cost structure and the absence of new asset default provisions, which previously contributed to substantial operating losses. Based on continued improvement in the U.S. and Canadian real estate market, current asset provisions are deemed adequate and future charges to income are not expected. As a result, its earnings profile should exhibit more stability than in the past. In addition, unit costs are expected to decline as Crown exits non-strategic businesses, expands its core life, group and reinsurance businesses and enhances its administration and corporate systems. Crown Life's capital position was significantly strengthened in 1995, when its majority shareholder, Haro Financial Corp., fully subscribed to Crown's $150 million convertible subordinated debentures. With its stronger capital base, Crown can more comfortably achieve its growth objectives, which include expanded distribution channels, a stronger franchise in Western Canada and possible acquisitions.

Overall premium income has increased as a result of growth in group life and health and reinsurance business. However, premium income from its U.S. branch life insurance business -- which represents about one fourth of total premium volume -- has declined as Crown continues to shift its marketing focus away from high income individuals to the middle income market. Although experienced personal producing general agents continue to be appointed, the company still must replace the substantial individual business volume previously generated by its traditional U.S. agency network. Although Crown's group pension business has expanded with the $300 million block of Aetna's group business and sales have increased, earnings are not achieving required returns due to the lack of critical mass. Although Crown's enhanced systems capabilities and expanded sales force are viewed positively by A.M. Best, the company will find it difficult to expand its pension business in light of the highly competitive Canadian group market.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source.

CONTACT: A.M. Best Co.

Jeffrey Dunsavage, 908/439-2200, ext. 5618

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